China just struck a $1 billion deal with Canadian copper producer Quadra Mining Ltd. for its assets in Chile and a stake in the Vancouver-based company, reported Canada’s Globe and Mail.

The joint-venture deal gives China a new copper source amid worries of a shortage in the country, while mid-tier producer Quadra receives the financing it needs to build projects and make future acquisitions.

The deal is the latest in a growing list of state-owned Chinese firms that have bought pieces of Canadian resources companies.

Quadra’s deal is a memorandum of understanding with State Grid International Development Ltd., a division of State Grid Corp. of China, the country’s largest utility company and one of the world’s largest copper customers. The deal is expected to be made official in May and close next fall.

It’s the first time State Grid has invested in a copper producer. The metal will be used to help develop power grids, and comes as China’s market is expected to see a shortage of copper this year despite a massive restocking in 2009.

State Grid will put $900 million into the joint venture as projects are built, and pay about CAD152 million for 10 per cent of Quadra’s shares.

The $900 million total is the value placed on Quadra’s two projects in Chile.

Source : Konaxis